Dish faces $3.3bn bill as FCC reportedly rejects spectrum discounts

WASHINGTON, July 16 The U.S. Federal Communications Commission on Thursday voted to begin capping the amount of discounts available to small businesses that bid in government auctions of airwaves. Those discounts came through the FCC’s designed entity (DE) program, which is intended to make it easier for small businesses to purchase spectrum and compete with large corporations.

Northstar and SNR spent $13.3 billion in the auction but received a 25% discount, lowering their bill to about $10 billion.

Chairman Tom Wheeler is said to have circulated a draft of his recommendation to the four other commissioners – the standard process for making policy at the agency.

The AWS auction raised $41 billion, not including the discounts given to Dish partners SNR Wireless and NorthStar Wireless.

Bloomberg reported Thursday that Dish Network has not presented the kind of offer Deutsche Telekom is looking for in terms of a Dish merger or wireless partnership with T-Mobile US.

In light of the new reforms, the Wall Street Journal reports the FCC is poised to reject the discount it afforded to Dish earlier this year, following a long review by FCC staff. “Dish, however, has annual revenues of nearly $14 billion, a market capitalization of over $32 billion, and over 14 million customers”.

The FCC voted to impose new restrictions on small business discounts yesterday, but they don’t apply retroactively. The report casts doubt on whether Dish can ink an agreement with T-Mobile, thus cashing in on the spectrum Dish has accumulated during the past few years.

In March, T-Mobile’s colorful CEO John Legere complained that the auction had been dominated by just three companies: AT&T, Verizon and DISH.